Outgoing Diageo CEO Paul Walsh can rightfully feel proud of his accomplishments at the global drinks giant. As The Grocer pointed out two weeks ago, Diageo’s share price has risen 234% under his tenure. No doubt there will be plaudits coming his way as he exits the business next June.
For me, one of his key achievements has been to embed a culture of innovation within the group. As Diageo itself says, its innovation agenda is a key growth driver for the business, making a significant contribution to net sales and critical to achieving its goal of 50% net sales generated from emerging markets by 2015.
One way this has been achieved is through the creation of an innovation team, whose sole focus is on developing new products to deliver organic growth. Another is through a sophisticated HR approach, led by global HR director Gareth Williams, who has focused on both talent and employee engagement, clearly demonstrating the value HR adds to the business.
In successfully delivering innovation, Diageo has managed to achieved something that many companies struggle with. A report last year by New York-based research group The Conference Board, CEO Challenge Report 2012, states that innovation is the number-one challenge for today’s CEO, pushing human capital and global political and economic risks out of the top spot.
Creating a culture of innovation is not easy but it is essential if a business is going to gain sustainable business benefits, as innovation is not just about product and service development but also new business models and markets. And as George Day, professor of marketing and co-director of the Mack Center for Technological Innovation at the Wharton School of the University of Pennsylvania, says, the most important ingredient for innovation is a supportive culture.
So here are four tips to get innovation into your business, courtesy of Deloitte: have a flat hierarchy give autonomy to all staff enable collaboration across departments, functions and companies and, finally, ensure there is open communication from the senior leadership team.
For, if you don’t build a deep culture of innovation in your organisation, you are not just limiting your growth prospects but threatening your survival.